Trust Funds for your Kids? Anyone?

[~Jayne~]

Hi Ladies,

I'll try give some background as best I can - but my basic question is do your kids have a trust fund on the go for when they turn either 18 or 21?

I had 2 that matured when I turned 18. One was from my grandparents who passed away when I was 3 & 4 years old respectively & another from a car crash I was in when I was around 8 years old. I received compensation for it & my parents put a trust on it to mature on my 18th birthday. Now it didn't all combine to a huge amount. I think I had about $800 from the car crash & maybe $1k from my grandparents? Their initial investment was $250 so it matured over 15 years quite considerably. This money went straight into my bank account & then the ENTIRE amount went straight onto my first mortgage.

Anyhoo, my parents are just about to inherit a LOT of money. I'm talking some serious money & they have told me straight out of their mouths that my sister & I will not receive a 'brass razoo' (their words). Can you tell I'm a little bitter? LOL. Considering the amount they have been 'guestimated', they will live very, very, very comfortable lives from now on.

I basically told them whatever, it's their money, it honestly is. But I did say it was nice that on my 18th birthday I had a gift from my grandparents awaiting for me even though they were long gone & if I had ANY say in any part this inheritance - I would request a trust fund set up for each of my kids to mature on their 18th birthday to put towards their first house, car or travel plans.

I should say this inheritance coming my parents way comes from a long line of ancestors of ours who now have unfortunately all passed away & hence this money has now become available. It's basically family money. My dad, sister & 4 cousins are the recipients of this money that dates way back to when the family first migrated to Australia from Britian. In all honesty, it's a shame it's all come to the surface, it would have been nice to have it re-invested for another couple of hundred years. But as it is today, all these 6 family member basically just want to take what's theirs & run & sever the family financial ties - another thing I think is really sad. Many of our relatives worked so hard for so many years to create this 'financial situation' & I feel it makes the recipients look lazy as they are just happy to gobble up the money & not try to keep the family going for another couple of centuries? I think it's nice family history. But anyway! I"m going off topic.

So, because of this, DH & I have decided that we would like to create trust funds ourselves for the girls. I assume we have to start with a sum of money & then each week/month/pay we can add to it as we wish & over the years it will grow, interest will accrue & then on their 18th we are able to give them a cheque?

Does anybody else do this for their kids? Our kids have bank accounts - but we use that as a 'working' account as we save in their for their school fees (we pay their international education & it's a ridiculous amount), so we save in there & then withdraw to pay the fees. I'm talking about something that CAN'T be touched?

I'm so sorry if this is long, I'll probably have to come back & add to it. But I just wanted to know if your kids have trust funds & did YOU create them, or are they from deceased family members like grandparents, etc...

Thanks!

[Astrolady]

We have 3 bank accounts set up which are high interest accounts. It says on their statements that they are in trust for and their names, but they aren't proper trust funds. We can't take any money out unless we physically go to the bank and sign a pile of papers, so $10 a fortnight goes into each. We have done this from birth. So only $260 goes in there every year, but Ashton who has just gone 4 already has over $1000, and Kameron who is 9 is pushing the $2500 mark, and that is without the monthly interest on top of it all.

We are not sure yet if they will get this money when they are 18 or 21... we have even considered 25!!, but it will be between $5000 and $6000 (if not more with the interest) each at the age of 18 years. Doesn't seem a lot for this day and age, but it is a start towards whatever they want.

[Astrid]

Each girl has their own bank account that I set up. They are one of those bonus saver ones that earns extra interest as long there is a deposit and no withdrawals for the month. All birthday and Christmas money go in. We also put in a small amount per month so they get the bonus interest. MIL also gave a large amount to each girl to help them get started on the way. My Dad has set up a separate trust account for each of them, he received some compensation and decided that a some of it should go to them. Being in trust means it is not part of his estate to be divided up when he passes on, it is safe for them.

I don't put a heap of money into the girls accounts at the moment as 1, we don't have it and 2, any surplus money at the moment should be paying off our mortgage. I see us being debt free sooner as much as a benefit to them, as a it will mean we will have more disposable money when they are 18 to help them out, rather than a mortgage still weighing us down. If we do become more financial sooner than expected then I will up the monthly amount.

[Mum2Romone]

WHen DS was born I opened a bank account for him, to make sure he never went without ANYTHING....

I have the account set up by my signature only, DH can't even access it. But it is my gift to my son. I have put his baby bonus in there and only had to use money once for an emergency.... He is only two but has nearly 9,ooo. The baby bonus plus interest.

when I have my next child in August I will do the same. it's not necessarily for their 18th or 21 St as at that time ALOT of ' people' aren't even sure what to do with that sort of cash, but it is for them, one day, and It will be from DH and I, It's just that DH has the travel bug ALWAYS so I keep him away

BTW When my parents pass And grandparents etc there will be more than enough to go around and to create trusts, but they are my kids and I want to know I've done this for them

[~Hestia~]

We set up an account for our son when he was born, DH's father got it started with a nice sum. We put in $25 a fortnight I think, would have to check as it's all done direct deposit. DH's father also puts in odd amounts every few weeks I've noticed. Once it gets to a certain amount we put it in a term deposit & keep adding that amount to it when his regular account reaches it. He'll get it when he turns 21. I said 18 but was voted against from the males We also have a moneybox in his room that we put our coins in that also goes in.

Forgot to add that none of us can access the money without signatures from all three of us. This was my thing as I felt very protective of the money for DS' sake when we started it! I am now comfortable with the idea of DH's father having access but don't see the point in changing it now.

[Livinthedream]

My mum puts $10p/w into an acc for my DS.
I also put birthday money etc in there.
It is to be used to further his future, ie if he shows any REAL talent as a sportman, or needs money spent on specialist education, and that is only if we cannot otherwise afford these thing ourselves.
If neither of those things happen, it will be used as a deposit on his first house, even if it is an investment property when he starts workng.
I will not be handing him a cheque for $10 000 on his 18th or 21st birthday and its not to be used for a car either.
At 18 or 21, someone handing me a load of cash would have been doing me no favours. JMO

[~Jayne~]

Thank you so much for your responses!!! Just about everybody is doing what I am thinking of doing. We have regularly put money into both kids bank accounts since birth, but used it all up paying their school fees for 2010/2011 school year. I wanted to do something additionally that we don't touch, so it all starts accruing. It doesn't matter how much or little you deposit per week, it's over time how much interest it generates & most of the time the $10 per week, we don't even miss - you know?

I also want the money to be available for flexible things - but very important things once they turn 18? Not just here's a big cheque, go blow it on some fun!! lol

[LisaBear]

Each of my boys has their own bank account. We oPened them just after they were born. The baby bonus we have received from either of them went into their accounts and we put money in every month. I think it's $100. My eldest who is 3 is pushing 8k. We put any money the boys are given into these accounts and lock it in term deposits to get a good rate. This being said we have to do tax returns for them because of their interest levels ea h year. So remember if you set account up to attach a tfn upon opening it.

Our kids will get their money when hey turn 18.

[grub17]

my parents had one for their three kids... I used by $8000 when i was 20 for a 6 week european trip! best spent money ever! My brother invested his and my sister bought furniture/whitegoods etc for her first home... So not all teens waste lump sums.

We opened a term deposit with high interest in DS's name when he was born. He's 14 months and has more tah 5500K already! my brother gave him $2000 straight off tho instead of buying a baby present and we put all his various bits of money into it, and gave it out when various family members wanted to give him money when he was born and on his christening we also put in $10 per week. We plan to give it to him when he turns 21.

We also pay the tax on it as we worked it out as being better than putting his money into a "children's account''.

We will do the same for the next bub... wonder if uncle money bags will be so generous again?? lol.

[Hansie]

I recieved an amount at 16 from my grandparents that they had held in trust.

We have a bonus savings account for both DS' which we put $15 'pocket money" per DS. On the anniversary of the account being opened the money is transfered into an attached account earning zip. We then withdraw the money & invest it by buying shares through E-Trade which we opened in trust also when they were born. DS1 has over $6000 inc money Grandparents gave him plus half of the baby bonus. We also opened him an ASG account to save for school each year this increases by 8% each anniversary. Not sure how much is in that. DS2 is just starting out so not as much, but with DS2 we haven't opened a ASG account as after further research it is very restrictive with it being a balanced fund and for the time we are investing for we can be a little more risky imo. Instead we save the same amout as DS1 but once we reach $500 - $1000 we buy more shares. Hopefully the E-Trade trusts & ASG will give us the money to pay for there education/sports/music etc as well as have money to help them to do whatever they want in the future travel, house, car etc. We have no real age set out for them to recieve the money just as they need it. We do have it in our Will's that if anything should happen to both DH & I then they would have control over there portfolios at 21.

[Gigi]

wow, this thread is an eye opener. I feel embarrassed bilby has no bank account. I'm about to start an account with The Smith Family (to save for her school expenses next year when her schooling begins). I spent the baby bonus on what we needed in the first two years of her life. (no flat screen tv i promise).

[Astrid]

wow, this thread is an eye opener. I feel embarrassed bilby has no bank account. I'm about to start an account with The Smith Family (to save for her school expenses next year when her schooling begins). I spent the baby bonus on what we needed in the first two years of her life. (no flat screen tv i promise).

Don't feel bad, whilst the kids have accounts, we had to spend the baby bonus on living expenses after dropping an income, so they got none of that.

[~Jayne~]

I'm so glad I opened this thread!!! Has given me so many ideas!

After I read Hansie's reply, I must admit, I remember now Jess has $4000 floating on the stock market in places. We invested her savings a few years ago now & then the market crashed, so we have just left it be, until they go up again - one day we will sell them & she will get the cash back into her account. I completely forgot about this!!! lol

I really fear for our children when they go to buy their first houses, cars, enrol in University or want to travel the world. Money just can't buy what it did in 'our' generation. More than anything I fear about how our children will afford to pay mortgages - this is the reason why I want to do some kind of investment saving plan - just to give them a helping hand, you know?

Such good ideas on here! I love it.

[Livinthedream]

Gigi, dont feel bad hon, we dont put any of our spare money into DS acc, we use it to improve our house or pay our mortgage. he lives here, so those things benefit him too.
DS bank acc is made up of $ given to him from family, and often if the family give the $ to me, I just use it to buy clothes and essentials for him, he has enough toys
I dont know any other mother that spends as much time trying to make their childs life safer/healthier/happier than you do.
I also used the baby bonus to pay household bills, as far as I am concerned the baby bonus = maternity pay, its not a bonus for the kid who was born LOL

[Olive]

one bit of advice..do i through a bank, not a finacial institution..we did it for our girls and now our money is STILL frozen from the GFC... who knows when we will get it back, at least banks are garaunteed by the government. we're owed lots
we have also set up high interest bank accounts and we add $30 each per month, both DH and i have to sigh to allow money out

[ElleJay]

I've got a childrens bank account set up for DS, and I've put a lock on withdrawls. It's pretty high interest too, and for only 16 months old, he's already for $225 in it. What I'm about to start doing (because I get paid weekly for now) is set up a direct transfer for $10 a week. I'm going to go into the bank in the next few days and see if theres a way that I can make is so he can't access it until he's 18.
I'm probably not much help, but thought I'd tell you what I do

[Pandora]

I have an ASG account for DS1 and about to open one for DS2

But not a bank account or trust fund, no.

My parents have one for each of them that I'm not supposed to know about though.

I do understand something of your situation, my dad and his 8 siblings are about to have to sort out a very large property/estate settlement. I'm not looking forward to the family politics